Edenred Shares Drop 4% at Thursday's Close
Edenred shares fell 4.03% this Thursday, January 22, to settle at 18.23 euros, erasing some of the spectacular rebound from the previous day. The stock remains under pressure with an annual decline of 41.85% and a loss of nearly 27% over three months. This decline occurs in an environment marked by price target revisions and regulatory uncertainties in its main markets.
Temporary Legal Reprieve Boosts Edenred Before Thursday's Fall
Edenred had surged more than 10% on January 21 following the announcement of the temporary suspension of an unfavorable decree by a Brazilian judge. The decree had planned to cap the commissions paid by merchants to meal voucher issuers and to reduce reimbursement periods, which would have heavily impacted the group's results. Meal vouchers and food vouchers in Brazil account for 9.5% of Edenred's global operational revenue in 2024. However, this suspension only concerns the meal voucher specialist and not its competitors. The government has 30 days to appeal, and a final decision is expected to be made by the end of 2026 or early 2027. While this temporary respite explains the renewed investor interest on Wednesday, the ultimate outcome of the dispute remains uncertain, which could justify the profit-taking observed the following day.
Financial Institutions Lower Their Forecasts
Several financial institutions have significantly lowered their estimates in recent days. Kepler Cheuvreux has reduced its price target from 40 to 28 euros while maintaining its Buy recommendation, anticipating a 13% drop in EBITDA by 2026 due to Brazilian challenges. Barclays, which had already downgraded the stock from overweight to market weight with a target reduced from 61 to 36 euros, has further cut its target to 21 euros, indicating limited upside potential relative to the current price. Alphavalue, meanwhile, maintains its Buy rating with a revised target of 29.90 euros. Technically, the stock is in a turbulent zone. The RSI is now at 51, returning to neutral territory after having approached oversold at 29 the previous day. The price is slightly below the 50-day moving average of 18.64 euros, and well below the 200-day average of 23.60 euros, indicating a continuing bearish trend. The resistance threshold at 19.05 euros is a major short-term technical obstacle.
